Operator of Centerville anti-aging skincare business convicted of tax fraud

DAYTON — A Germantown businessman who controlled a Centerville anti-aging skincare business is going to prison -- the maximum would be for 21 years -- on tax fraud charges that accused him of diverting tens of thousands of dollars to himself, to pay rent for his mother as well as high school and college tuition for his five children, Justice Department Tax Division officials announced Tuesday.

According to facts from an April indictment, evidence testimony presented at trial, Wright oversaw the day-to-day operations at the B&P Company Inc., 97 Compark Drive, which manufactured and sold an array of skincare products -- including Frownies, a wrinkle reduction product endorsed by celebrities, Acting Deputy Assistant Attorney General Stuart Goldberg said in a prepared statement.

Wright's great-grandmother invented Frownies in 1889 and the product has been sold by his family ever since, according to the Justice Department.

Frownies have existed since 1899. The original product was called Wrinkle Eradicator and is shown on the left. On the right are various other versions of the packaging over the years. (Skip Peterson/Dayton Daily News)(Skip Peterson)

Wright, beginning in the late 1990s, formed a series of entities to divert money from B&P to himself and family members. Instead of receiving a salary from B&P, Wright incorporated a company called The Remnant Inc., to which B&P paid "management fees."

He caused the preparation of false corporate tax returns for The Remnant on which he deducted personal expenses including rent, utilities and pool and lawn care for his residence. Wright also used funds from The Remnant's bank accounts to pay rent for one of his daughters in New York and California.

He paid personal expenses directly from B&P's bank accounts as well. He directed B&P employees to use corporate funds to pay rent and utilities at an apartment his mother rented, as well as rent for his daughter in New York.

In 2004, Wright applied to the IRS for non-profit status for a private foundation called Fore Fathers Foundation. He caused B&P to make donations to the foundation and then used more than $170,000 of the foundation's funds over a seven-year period to pay for high school and college tuition for all five of his children.

According to trial testimony, these payments constituted acts of self-dealing that Wright was required to disclose on the foundation's tax returns and pay excise taxes on. When Wright filed the foundation's returns for 2003 through 2009, he falsely reported that he had not engaged in acts of self-dealing and failed to pay excise taxes due on the distributions.

The 2003 package of Frownies(Skip Peterson)

Evidence at trial also established that Wright had a long history of interactions with the IRS.

+ In 1998, he pleaded guilty to tax evasion for using trusts to conceal income from the IRS. This criminal case arose from an audit of Wright's individual income tax returns.

+ In 2002, the IRS initiated an audit of The Remnant's income tax returns.

+ During a 2010 audit of B&P's income tax returns, Wright falsely stated to an IRS revenue agent that he had no prior dealings with the IRS, despite the fact that he had been criminally prosecuted in the 1990s and audited in both the 1990s and early 2000s.

Wright faces a statutory maximum of three years in prison on each count, as well as a period of supervised release, restitution and monetary penalties.